House votes to renew tax on hospitals to avert TennCare cuts

Thursday, April 28, 2011 at 11:45am

The state House voted Thursday to renew a tax on hospitals to avert cuts in TennCare, and Democrats called off a threatened uprising to try to raise even more revenue.

Gov. Bill Haslam’s state budget recommendation assumes the legislature will adopt the more than $400 million in hospital fees, which would qualify for a 2-to-1 match by the federal government.

The state’s hospital association has agreed to the tax for the second year in a row to keep TennCare funding and to avoid having to absorb the costs of treating uninsured patients as charity cases.

Haslam’s budget plan for the fiscal year starting July 1 proposes to extend the tax for another year and raise it from 3.5 percent to 4.5 percent of the hospitals' net patient revenue. Even in the governor’s budget with the hospital tax, there are $40 million in cuts in TennCare, the state’s version of Medicaid.

Democrats threatened to try to raise the tax another percentage point to the maximum allowed by the federal government to draw more matching money to pay for health care.

“For every dollar we put up, we get two from the federal government. With $100 million investment, not by us but by the hospitals on our behalf, we get to pull down an extra $200 million,” Rep. Joe Armstrong, D-Knoxville, told the House.

Democrats withdrew their amendments to raise the tax after their party’s House leader, Craig Fitzhugh, met with the governor before Thursday’s session began. Democrats had been demanding that the governor work with them more closely on his budget proposal.

The vote for the hospital tax was 86-3. It already has passed the Senate. Some Republicans were queasy about voting for it because they were afraid of the political repercussions of voting for a tax.

Before voting, Rep. Rick Womick, R-Rockvale, insisted to the House that the tax actually was a donation by hospitals to the state.

“This is not a tax,” he said. “This is a donation really to state government in order to get money from the federal government.”

4 Comments on this post:

By: mg357 on 4/28/11 at 11:59

Here's some interesting stats published in the NY Times regarding a study done by Rutger's University. 70% of the Tenncare/Medicaid recipients are children. These children are 4 times as likely to be prescribed anti-psychotic meds {heavy duty chill pills that cost as much as $400 per month} than a child whose parent has private insurance. Check out the Tennessee OIG website and look at page after page of arrests for narcotic meds fraudulently paid for by Tenncare? Some have multiple arrests. My question is why haven't they been excluded from taxpayer funded healthcare.........mg

By: frodo on 4/29/11 at 7:59

Good question, mg. I heard awhile back that TennCare patience overall are far more likely to be drugged up than the general population.What the hay is going on with all that? Is it really a problem wit the class of doctor that provides TennCare services? Sad to think we might have that many shady physicians among us. No surprise at all that they would be selected via a government-run program.

By: mg357 on 4/29/11 at 9:41

Frodo; a short time ago when the Medicaid funding came under the gun; one of the Senators requested records from Tennessee on the names of the doctors prescribing all of these anti-psychotics. Guess what; Tennessee declined to release that info. Wonder why........mg

By: mg357 on 4/29/11 at 11:33

Frodo; the US Senator was Charles Grassley- Utah. The Bureau of Tenncare only released the numbers of psychotropic drugs being prescribed; not the names of the physicians ordering the scripts. It seems we have some heavily medicated kids, do we not? In view of all the class action lawsuits involving all of these heavy hitter chill pills and the sometimes lethal side effects, why prescribe them in the first place..........mg